In practice, many markets do not exhibit all the conditions necessary for workable or effective competition. Market failures occur in many forms. The two most associated with the need for regulation are:
- Monopoly, including natural monopoly, and
- Externalities.
When market failures arise, it is necessary to consider whether the problem is likely to correct itself. If market failures will not correct themselves, then there may be a need for additional tools to foster effective competition or to prevent socially undesirable outcomes.
This section of the Toolkit introduces two broad approaches to promoting competition in the ICT sector, namely competition policy and regulation. Competition policy and regulation are not mutually exclusive. Many countries use a mix of both. However, care is required to ensure that sector regulation and competition laws and policies are developed and applied consistently.
This section discusses the following topics:
RELATED materials
Module 2, section 2.2, Why Focus on Competition?
Module 2, section 3.2.3, Asymmetric Interconnection Regulation
Training on Competition Policy and Interconnection in Telecommunications Market of Mongolia, 4-7 July 2003 - Ulaanbaatar, Mongolia (contains numerous presentations, reference documents, and summary reports)